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Most vulnerable households in UK to receive £1,200 to cope with rising costs

Households will receive a £400 discount on their energy bills from October said Chancellor Rishi Sunak

Most vulnerable households in UK to receive £1,200 to cope with rising costs

MOST vulnerable households in UK will receive at least £1,200 this year, including a new one-off £650 cost of living payment, as part of targeted government support to help with the rising cost of living crisis, it was announced on Thursday (26).

British chancellor Rishi Sunak also announced a 25 per cent windfall tax on oil and gas producers' profits, alongside a £15 billion package for households struggling to meet soaring energy bills.


According to the statement, more than 8 million low-income households will get the benefit of the new funding including the £150 council tax rebate that many families received last month. Besides, separate one-off payments of £300 to pensioner households and £150 to individuals receiving disability benefits were also announced.

Sunak also announced that households will receive a £400 discount on their energy bills from October as the discount will be doubled from £200 to £400.

The chancellor also announced a £500 million increase for the Household Support Fund, delivered by Local Authorities, extending it from October until March 2023.

Customers queue to enter a Stone Island shop in London on May 12, 2022 Customers queue to enter a Stone Island shop in London on May 12, 2022. (Photo by JUSTIN TALLIS/AFP via Getty Images)

“We know that people are facing challenges with the cost of living and that is why today I’m stepping in with further support to help with rising energy bills. We have a collective responsibility to help those who are paying the highest price for the high inflation we face. That is why I’m targeting this significant support to millions of the most vulnerable people in our society. I said we would stand by people and that is what this support does today," Sunak said.

“It is also right that those companies making extraordinary profits on the back of record global oil and gas prices contribute towards this. That is why I’m introducing a temporary Energy Profits Levy to help pay for this unprecedented support in a way that promotes investment.”

The statement added that the windfall tax is expected to raise around £5bn in its first 12 months. This temporary tax will be phased out once gas prices return to normal levels. The levy does not apply to the electricity generation sector, the government said.

The new investment allowance incentivises companies to invest through saving them 91p for every £1 they invest.

The government expects the combination of the Levy and the new investment allowance to lead to an overall increase in investment, and the Office for Budget Responsibility (OBR) will take account of this policy in their next forecast, the statement added.

The government is consulting with the power generation sector and investors to drive forward energy market reforms and ensure that the price paid for electricity is more reflective of the costs of production.

Sunak also set out the government’s strategy to control inflation through independent monetary policy, fiscal responsibility, and supply side activism.

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